Canadian Oil Sands Development – The Risks and Rewards

The chief geologist for a Canadian regulatory agency says the group is working to assess potential risks in the development of Alberta oil sands and heavy oil by better understanding the full geologic framework.

Fran Hein, senior geology adviser for the Alberta Energy Regulator, said the agency plans to organize the risks of unconventional resources play-by-play and to improve collaboration by all stakeholders.

AER is developing a risk-scenario model in 3-D for surface and atmosphere for unconventional resources.

“We’ve got part of it working right now. We’re working on refining it,” she said. “We’re building digital atlases from the underground up to layer development and looking at geologic risks. We’re trying to get a more automated approach.”

Hein, who also serves as president of AAPG’s Energy and Minerals Division, spoke at the EMD luncheon at AAPG’s Annual Convention and Exhibition 2015 in June in Denver, where she discussed the challenges and risks of Alberta’s oil sands production.

Risk Management

Hein explained that, as the Canadian government moves more toward the left politically, there has been a greater emphasis placed on environmental protection.

“Increasing technology also is one of the main drivers of change as the industry is depleting conventional oil and gas resources. We are now going into heavy oil and oil sands. There are abundant unconventional resources,” she said.

Extended reading

The chief geologist for a Canadian regulatory agency says the group is working to assess potential risks in the development of Alberta oil sands and heavy oil by better understanding the full geologic framework.

Fran Hein, senior geology adviser for the Alberta Energy Regulator, said the agency plans to organize the risks of unconventional resources play-by-play and to improve collaboration by all stakeholders.

AER is developing a risk-scenario model in 3-D for surface and atmosphere for unconventional resources.

“We’ve got part of it working right now. We’re working on refining it,” she said. “We’re building digital atlases from the underground up to layer development and looking at geologic risks. We’re trying to get a more automated approach.”

Hein, who also serves as president of AAPG’s Energy and Minerals Division, spoke at the EMD luncheon at AAPG’s Annual Convention and Exhibition 2015 in June in Denver, where she discussed the challenges and risks of Alberta’s oil sands production.

Risk Management

Hein explained that, as the Canadian government moves more toward the left politically, there has been a greater emphasis placed on environmental protection.

“Increasing technology also is one of the main drivers of change as the industry is depleting conventional oil and gas resources. We are now going into heavy oil and oil sands. There are abundant unconventional resources,” she said.

“In about 2008 unconventional energy resources became more important in Alberta. Starting then, we had a significant increase in horizontal wells. As of 2013, over 90 percent of wells drilled in Alberta are horizontal,” Hein said. “We’re a resource-based province, so they’re important. Most projects last 30 to 40 years, so it’s a long timeframe for oil sands projects.”

AER is now the single regulator of energy development in Alberta, with the stated mission to ensure safe and efficient development of hydrocarbon resources and to oversee energy development from application and exploration, through construction and development, to abandonment, reclamation and remediation.

To deal with oil sands and heavy oil development, the Alberta Energy Regulator looks at production, outcomes, land use and how companies are operating.

“The technique to get oil sands is not dirty – it’s not a dirty process. It largely uses hot water,” she said.

“One of the main things we’re starting to manage is risks, both real and perceived,” she said.

That includes water quality and quantity, landscape cumulative impacts, air emissions, technical and social impacts, and communication.

Responding to Complaints

The regulatory agency also responds to complaints about air emissions from heavy oil and oil sands production.

“We’ve done analysis and held hearings. We realized that some areas were impacted and had a higher sulphur content. Now all emissions have to be captured,” she said.
Noting that there had been some active flaring in the past, Hein said the AER now does not allow continued flaring.

“All emissions now have to be captured,” she said. “It’s sort of an ongoing study.”

In the past, an environmental group complained that one of the impacts of oil sands is destruction of the North American Boreal Forest in Canada and Alaska.

Hein looked into the complaint and actually calculated how much of an impact heavy oil production has on the forest landscape of Canada. She found that it only impacted 0.4 percent of the total forest landscape.

“The first part has been reclaimed to grasslands,” she said. Even though the land wasn’t grassland prior to development, “landscapes are not static,” she noted.

In May 2006 there was a blowout, or steam release incident, at Joslyn Creek in the Athabasca oil sands deposit. Nearby trees were blown out due to the high pressure when steam rose up. It caused damage to a surface pipeline west of the release.

“The total event took 15 minutes,” she said.

AER conducted an investigation into the cause of the blowout that included the forensics industry as well as AER geologists, engineers and geophysicists.

“There were three to four periods before the blowout where it had a significant drop in pressure but the company jacked up the pressure and kept going,” she said. “The initial application for the project was approved 25 years earlier.”

After looking at all contributing causes to the steam release incident, there did not appear to be any one “smoking gun,” Hein said.

The oil sands and heavy oil in Alberta Basin have evolved over millions and millions of years. There was a lot of surface seepage over that time but no one has any idea how much was expelled.

“It’s a fairly complex picture,” she said.

Along with Alberta, the Ventura region in California is another major site in North America with a wealth of heavy oil.